MILITANT lawmakers on Tuesday asked the Supreme Court (SC) to stop water service concessionaires Maynilad Water Service and Manila Water Co. from demanding compensation for their losses from the government.
Bayan Muna party-list representatives Neri Colmenares and Carlos Zarate filed a petition for certiorari with prayer for a temporary restraining order and/or a preliminary injunction against implementation of additional water rates.
Aside from the water service concessionaires, also named as respondents are President Benigno Aquino 3rd, Finance Secretary Cesar Purisima and officials of the Metropolitan Waterworks and Sewerage System (MWSS).
Colmenares said they filed the petition on behalf of 12 million consumers who stand to be adversely affected by the scheme being pushed by Maynilad and Manila Water despite the poor service they render to the public.
He added that Maynilad and Manila Water wanted to pass on corporate income taxes to consumers by increasing their rates but are being barred from doing so by the MWSS.
Colmenares and Zarate argued that corporate income taxes cannot be considered as expenditures and cannot be passed on directly or indirectly to consumers.
The scheme would affect 12 million consumers, they said.
“Ultimately, it is as if there is no regulation at all since any rate increase, even if found unjust, will be imposed anyway. Even if the water-consuming public opposes a proposed increase before the MWSS or files a case before the Supreme Court and wins, the sovereign guarantee thwarts this victory by simply imposing it indirectly. In the end, the hapless public still pays,” the petition read.
“Such grave and irreparable illegal impositions consist of the implementation and enforcement of Arbitral Awards which we argue is contrary to the dictates of public policy and the consequent implementation of two contradictory regulatory regimes in MWSS’s lone franchise area, as well as the impending illegal multi-billion claims of Maynilad and Manila Water against the sovereign guarantee under the Republic’s Letters of Undertaking,” it said.
In the petition, Colmenares and Zarate explained that even if the arbitration panel affirms the MWSS decision and denies the rate increase application, the utility concessionaires could still go to the government and ask “that [they]be compensated through ‘sovereign guarantee’ under their Letter of Undertaking.”
If approved, “the people still pay even if they won their case against rate increases at all levels,” the petition said.
Maynilad is supposedly asking for P5 billion.
Manila Water, on the other hand, reportedly wants P79 billion for potential revenue losses from 2015 until the end of its 25-year contract or until 2037.
Colmenares said this is illegal as water concessionaires are public utilities.
He explained that corporate income tax is not a recoverable expenditure that may be passed on to the public.